Gold has traded between $1,218 and $1,232 so far today…as of 8:00 am Pacific, bullion is up $3 an ounce at $1,226…Silver has retreated 4 pennies to $16.48 (see updated Silver charts at the bottom of today’s Morning Musings)…Copper is 3 cents lower at $2.76…Crude Oil, which has fallen for 7 straight weeks, has slid another $2.43 a barrel to $45.93 while the U.S. Dollar Index is off its high of the day but still firm at 92.13…
Gold posted its biggest weekly gain since June last year at 2.9%, also snapping a 3-week decline…technically, as John’s 6-month chart showed yesterday, the key for Gold today is to confirm Friday’s breakout above Fib. resistance at $1,216…key resistance is at $1,240…given Gold’s current technical posture, it’s reasonable to speculate that a test of the December high ($1,239) will come this week…
The OECD reported overnight that economic growth in the coming months is likely to be stable in the U.S. and Canada…it will slow in Germany, Italy, Russia and the U.K., and will increase in China and India…
Speaking of India, global statesmen and business titans descended on Prime Minister Narendra Modi’s home state yesterday to pay homage to the man they count on to unleash big-bang reforms and create 1 of the few bright spots in a troubled world economy…Modi says it’s time for India to roll out the red carpet for business, not red tape, to create new economic opportunities…Rio Tinto PLC is paying attention…it has announced plans to invest $500 million in a diamond mining project in the central Indian state of Madhya Pradesh…according to details of the project on the company’s web site, the Bunder deposit is the first diamond discovery in India in over 40 years and one of only 4 new diamond mines globally which are likely to become operational in the next decade…
Oil Update
Analysts at Goldman Sachs have cut their 3-month forecasts for Brent to $42 a barrel from $80 and for the U.S. WTIC contract to $41 from $70 a barrel…the bank cut its 2015 Brent forecast to $50.40 a barrel from $83.75 and U.S. Crude to $47.15 a barrel from $73.75…
“To keep all capital sidelined and curtail investment in shale until the market has rebalanced, we believe prices need to stay lower for longer,” Goldman Sachs’ analysts stated in the report…
The average price of regular gasoline across the U.S. has dropped 27 cents a gallon in the past 3 weeks, to $2.20…this is believed to be the lowest average price in more than 5 years, and further drops of course are possible though probably not as steep…lowest prices in the nation were found in Albuquerque, New Mexico, at $1.76 a gallon…Edmonton has the lowest Canadian prices at 73 cents a liter ($2.76 CDN per U.S. gallon)…
A World Becoming More Chaotic
How will Gold respond in 2015 to an increasingly dangerous and chaotic world trying to cope with the cancer of Islamist extremism, while at the same time handicapped by relatively weak international leadership compared to crises points in decades past?…
The problem is profound…the competitive dynamic between ISIS and Al Qaeda should also be of major concern (for recruiting and publicity purposes, each is trying to be more terrorizing than the other and Al Qaeda – in its view – scored a PR coup in France), while the reach and extent of this evil ideology cannot be underestimated…mainstream media have given non-stop coverage in recent days to last week’s barbaric attacks in France by Islamist terrorists, but little has been heard of the horrifying situation in Nigeria where as many as 2,000 innocent civilians were slaughtered January 3 in a bloody escalation by Islamist group Boko Haram…leader Abubakar Shekau announced the establishment of his “Islamic Caliphate” last August…Boko Haram now controls about 20,000 square miles of territory, an area the size of Belgium, and the Nigerian army is incapable of stopping the jihadist advance…
On the home front, security agencies are “closely monitoring” the situation after a just-released video posted on the Internet repeated calls by ISIS to kill Canadian civilians, police and members of the military…unlike President Obama, Prime Minister Stephen Harper at least seems to understand the “Big Picture” reality of Islamist terrorism when he stated last week, “The international jihadist movement has declared war. They have declared war on anybody who does not think and act exactly as they wish they would think and act. They have declared war and are already executing it on a massive scale on a whole range of countries with which they are in contact.”
Today’s Equity Markets
Asia
China’s Shanghai Composite fell 54 points overnight to close at 3231 after reports of upcoming new listings this week…
Europe
European markets are mixed in late trading overseas…speculation continues to mount that the ECB will announce a QE program later this month…
North America
The Dow is off its lows of the day, down 81 points as of 8:00 am Pacific…the TSX has fallen 192 points, despite strength in the Gold Index this morning which is now above the 170 level for the first time in 3 months…
The Venture is off 9 points at 678 through the first 90 minutes of trading…the zone of support to watch closely ranges from 654 to 680…
Venture 5-Year Weekly Chart
Oversold conditions even more intense than those witnessed during the second quarter of 2013 have prevailed since October on the Venture, though a gradual thawing continues after the deep freeze the Index was plunged into…
It’s clearly a safer time now to pick away at bargains than it was at anytime from October through early December…each year throughout this bear market since 2011, RSI(14) has consistently moved out of oversold territory – like it’s in now at 27% – to at least the 50% level…investors who have sold into those rallies have been able to buy back at lower levels later on…
AuRico Gold (AUQ, TSX) Update
John’s New Year’s chart for AuRico Gold (AUQ, TSX) showed the strong possibility of a very bullish start for AUQ which is also beginning to benefit from increased investor awareness of the company’s Copper-Gold porphyry drilling discovery at Kemess East reported December 15…
AUQ has surged 25% through just the first 7 trading sessions of 2015, and the stock is also now breaking above a long-term downtrend line on John’s 3-year weekly chart…juniors who are strategically positioned in the Quesnel Trough area around Kemess East can be expected to benefit from AuRico’s important discovery, with more drilling and an initial resource estimate on the way…
AUQ is up 23 cents at $4.89 as of 8:00 am Pacific, putting it above the downtrend line where it closed at Friday…
Probe Mines (PRB, TSX-V) Update
The chart for Probe gave some distinctive bullish signals during the first half of December, and readers who took advantage of that opportunity have seen PRB jump about 25% since that time…a mild pullback in the near future wouldn’t be surprising given the sharp move since the important November 5 intra-day low of $1.96, but PRB is well-positioned to continue to be a Venture “out-performer” in 2015 based on both technical and fundamental factors…
Winter drilling at the Borden Project in northern Ontario, and a Preliminary Economic Assessment (expected during the first half of 2015) will keep news flow strong over the coming months…Borden represents a significant new Gold discovery in a previously under-explored part of Ontario, and is distinguished by a number of features including well-developed infrastructure, a consistent and well-zoned mineralized horizon, and a NI-43–101 resource estimate that includes an important high-grade zone…
PRB is off 7 cents at $3.25 as of 8:00 am Pacific…PRB should be strongly supported by its rising 50-day moving average (SMA), currently at $2.72…
Fairmont Resources Inc. (FMR, TSX-V) Update
Another Venture out-performer we see continued high opportunity in is Fairmont Resources (FMR, TSX-V), for reasons we initially outlined late last week…this company also stands to benefit directly from lower fuel prices…
As an industrial minerals company, Fairmont is not in the most “glamorous” of sectors but it’s in a profitable one…in mid-December, the company received a certificate of authorization which allows 300,000 tonnes annually of aggregate production at its Buttercup Property near Chicoutimi, Quebec…based on a historical resource, the current plan is to produce titano-magnetite aggregate from lens A, and quarry toward lens B thereafter…
Armed with the “CA”, Fairmont is now in a position to line up sales agreements in advance of production, and that’s in part what can energize this stock over the winter…if the company is successful in meeting its cash flow targets, then the upside potential here is truly significant for a stock that has less than 18 million shares outstanding and a current market cap of just over $3 million…
Fairmont took the Buttercup from the acquisition stage to the certificate of authorization in less than a year, so this is an experienced management team that knows how to achieve milestones and targets…
Technically, below is a 1-year weekly chart (with Venture comparative) that really speaks volumes about the strength of the overall uptrend FMR has been in since the beginning of last year…note also the breakout above the short-term downtrend line in place since late September…
Silver Short-Term Chart
Silver in December finally staged a definitive breakout above a downtrend line that was in place since the summer on this 9-month daily chart…the December 1 dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support has been demonstrated around $15 and the metal made a recent run toward near-term resistance at $17.50 before backing off to current levels around $16.50…
Note how the downtrend line has become new support, while there’s also near-term support around $15.60…RSI(14) is holding support and moving up, so the immediate trend continues to be generally positive amid the choppiness we’re seeing in the current trading…
Silver Long-Term Chart
This 34-year monthly chart continues to give hope that Silver could be preparing for a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…
RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15…
Fundamentally, Silver has been hurt by a slowdown in global economic growth…if economies in the euro zone, China, India and Japan perform better than expected in 2015 (that’s a big “if”), Silver could begin to appreciate rapidly…Silver will also follow Gold to the upside, if Gold suddenly decides to take off for any number of possible reasons…
One note of concern on this chart is the sell pressure that has prevailed since the beginning of 2013, after a decade-long period of buy pressure…based on historical patterns, sell pressure could persist for a considerable time yet…
Note: John, Terry and Jon do not hold share positions in AUQ, PRB or FMR.
BMR – …Unlike President Obama, Prime Minister Stephen Harper at least seems
to understand the “Big Picture” reality of Islamist terrorism.
Bert – For goodness sake, didn’t we have two lone wolf attacks in Canada
during the last month or so, someone in Canada failed to understand something.
Let’s see if Harper can get to understand what Mike Duffy’s plans are..
Comment by Bert — January 12, 2015 @ 8:59 am
Duffy is facing criminal charges . Whatever leverage he thinks he has should be used by him to negotiate a plea bargain , otherwise his punishment will be very long …
Comment by Fiat — January 12, 2015 @ 11:20 am
Jon, are you watching BHS “Bayhorse Silver” they recently announced interest in a producing oil field. Also the Bayhorse silver mine will be in production soon!!
Comment by Jeff — January 12, 2015 @ 1:05 pm
Hello Fiat
Regarding Duffy, no doubt he was a bad boy, but my point was,
will he bring down Harper,(the great Understander), with him.
A large part of our population is waiting.
Comment by Bert — January 12, 2015 @ 1:24 pm
From VANTAGEMEDIA with permission to republish included in text
Headlines Signal Bear Market Bottom for the Canadian TSX-Ventures Exchange
Dajin Resources Cited in Landscape of ‘Good Buys’
Historical evidence is mounting that TSX Venture Exchange has now hit bottom,
and investors have a rare opportunity to create wealth by investing in good
companies and catching a rising tide.
We sat down with capital market veteran Ron Loewen to discuss the potential to
create wealth in the current market. Loewen specializes in funding and restructuring
public resource companies.
“I’m a technical contrarian by nature,” states Loewen in an exclusive interview with
the Financial Press, “I seek value and I make money where it is there to made – including
shorting overvalued stocks.”
“The TSX Venture Exchange can be a difficult animal to understand and to predict,” admits
Loewen, “When times are bad, it’s hard to make aggressive decisions. Part of us always feels,
‘it’s different this time’ ‘things won’t get better’. But the history of the TSX.V proves – not
just that they will – but they always do.”
Loewen stresses that it is human nature to have a ‘herd mentality’ and not think rationally. ‘A
herd appears to act as a unit,’ explains evolutionary biologist, W. D. Hamilton, ‘but its function
emerges from the uncoordinated behavior of self-seeking individuals.’
“It’s sad, but we need bear market bottoms to purge investors, brokers and weak public companies
out of our industry,” explains Loewen, “Negative headlines of broker layoffs, over regulated markets,
sinking commodity prices and general despair are the signal that we have reached the bottom and are
about to enter a new bull market.”
‘Buy on Bad News – Sell on Good News.’ It’s easy to say, harder to do. Historical data confirms that
when a stock index plummets dramatically on what seems like never ending bad news, it will rebound
just as dramatically. And for more than 30 years, widespread negative newspaper headlines have been
an accurate predictor of Canadian Venture Exchange market bottoms.
To see the full infographic by Visual Capitalist click here.
To illustrate his point, Loewen retrieves News Headlines from his research files on other bear market
bottoms and we begin to see a trend.
Just prior to the stock market bottom of 1982: “VSE Twisting In Economic Winds”, “Vancouver Stock
Exchange Closes Lower For 27th Consecutive Day,” “Index Passes Another Milestone On Its Downward Path.”
Just prior to stock market bottom of 1984: “Economic Slump Leaves VSE Reeling,” “VSE Is The Last Vegas
Of North American Stock Exchanges,” “VSE Slide May Be Worse Ever In Canada”
Prior to market bottom of 1989: “Scam Capital Of The World,” “VSE In Free Fall,” “Gold Falls To $370,”
“VSE Plummets To All Time Low”.
From 2013/2014: “TSX Venture is Broken”. “US Dealer Shutters Toronto and Calgary Offices Amid Gold Slump.”
“Investors Run For Cover” etc.
When pressed about the sectors he is following, Loewen mentions lithium where acquisitions and takeovers
with senior lithium producers continue (i.e. Albermarle’s purchase of Rockwood Holdings for $6.2 billion
dollars). At the same time the mid-cap lithium sector saw Toronto Stock Exchange listed Orocobre Limited
officially open their Olaroz lithium mine in December of 2014.
Pressed for an example of an interesting junior lithium company, Loewen mentions Dajin Resources (DJI-TSX.V),
which holds 100% interest in lithium and boron claims in the Teels Marsh region of Mineral County, Nevada
and significant land holdings of lithium targets in the Jujuy province of Argentina, near Orocobre.
“There are a lot of very good buying opportunities in the juniors markets right now,” states Loewen, “I’ve
got my investment group focusing on a number of things, but in the junior space, Dajin because their Teels
Marsh is a potentially huge lithium asset in the direct vicinity of Tesla Motors’ announced Gigafactory, in
Nevada.”
“The Tesla Gigafactory will use 25,000 metric tons of Lithium per year,” states Loewen, “around a fifth of
the world’s capacity. What Tesla is doing has validated to the mainstream what many of us in the Lithium space
have known for a long time, that there are huge advancements happening in battery and ion technology that are
going to change the face of how we power everything around us. We’re right on the cusp of that – Supplying the
Gigafactory is predicted to raise demand for lithium in the battery industry by about 55%, and demand in the
overall market by 20%.”
Loewen continues, “While the Canadian Venture Exchange has gotten pounded, I’ve been quietly mentoring Dajin.
The company has done a great job of getting themselves in the right position at the right time. Dajin is involved
in two of the world’s best known brine based lithium salars with the underlying metal experiencing increasing
global demand.”
The International Energy Agency predicts 40 million battery electric vehicle sales per year by 2050, from current
annual sales of 150,000. This macro trend is spreading quickly from West to East.
According to the World Bank, air pollution costs China around $300 billion a year in health problems and loss-of-productivity. In response, the Chinese central government just announced a slate of pro-electric car policies
including slashing charging station rates by 30%.
Navigant Research predicts that global lithium ion battery sales for all devices – including cellphones, laptops, commercial aviation and aerospace – will increase 400% by 2023.
“Investors should not wait for more positive headlines before allocating some of their capital to overlooked and historically cheap stocks,” advises Loewen, “history does matter. The barrage of negative headlines aimed at the
Venture market is the signal that we have reached the bottom. When the turn-around happens it will be dramatic
and the markets will reward the early and the bold.”
Ron Loewen can be reached at ronwloewen@gmail.com and found at linkedin…
Dajin Resources Corp. can be reached at info@dajin.ca and found at Dajin website…
Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This
document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase
or subscribe for any investment. No information in this article should be construed as individualized investment
advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press
makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice.
Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness
of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect
loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.
Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back
link to FinancialPress.com are provided. Thank you.
Dajin Resources Corp.
450-789 West Pender Street
Vancouver BC, Canada V6C 1H2
604.681.6151
info@dajin.ca
Comment by Bert — January 12, 2015 @ 4:45 pm
We can see the core of hole 23 on DBV website!
Comment by Guy Delisle — January 12, 2015 @ 4:59 pm
Some nice looking core, there, Guy; they definitely got into some Sheslay Red Stock, pyrite, chalcopyrite – visuals are tricky but hopefully it runs. I saw some of the core from Hat-08 and HAT-11 during our site visit in April; to the naked and non-geo eye, this stuff looks even better. Let’s cross our fingers. It’s possible we may see initial results as early as next week.
Comment by Jon - BMR — January 12, 2015 @ 5:12 pm